CLIMATE:

14 hours later, Democrats hold the line on cap-and-trade bill

Darren Samuelsohn and Ben Geman, E&E senior reporters

E&E Daily: Wednesday, May 20, 2009

House Democrats defeated a series of Republican "benchmark" amendments aimed at halting a future U.S. global warming law during a 14-hour, politically charged Energy and Commerce Committee markup yesterday.

The GOP amendments took on a familiar theme by proposing the law's sunset should the measure lead to significant job losses, higher gas prices and electricity rates, or a lack of corresponding action from China and India.

While the Republicans lost each of their amendments, they did their best to gain political traction with each vote. Minutes after each roll call on amendments to H.R. 2454, the House GOP's campaign operation blasted reporters' inboxes with press releases pinpointing Democrats who voted against their amendments.

"$5 gasoline apparently not too much for Energy and Commerce Dems," was the headline of one National Republican Congressional Committee press release that spotlighted the votes of nine House Democrats.

Even the atmosphere complied with the GOP storyline late last night when a silky terrier started barking just outside the Rayburn hearing room. "They're coming for you," joked Rep. Fred Upton (R-Mich.).

Moments later, Rep. John Barrow (D-Ga.) crossed the aisle to vote in favor of a Republican amendment that would halt the climate law if the nation's unemployment rate hit 15 percent, prompting Upton to add, "He heard 'em."

Energy and Commerce Chairman Henry Waxman (D-Calif.) and his committee allies did not let the Republican alternatives go unanswered, explaining that their 946-page comprehensive energy and climate plan would curtail greenhouse gas emissions, create new jobs and reduce U.S. dependence on foreign oil.

"Your only solution to any benchmark is to have the law evaporate," Waxman said. "That's not thoughtful."

"It's a very pessimistic view of the future," added Rep. Ed Markey (D-Mass.), the bill's lead co-sponsor. "It almost guarantees we wind up with $5 gasoline. It almost guarantees we end up with higher unemployment."

Those were familiar themes throughout the daylong markup even as the subject matter shifted among 17 different amendments.

Rep. Roy Blunt (R-Mo.) lost, 23-32, on a proposal that would have negated the entire law if the average retail price of electricity sold to residential sector goes up by more than 10 percent in one or more census divisions.

The former majority whip insisted his amendment was a straightforward way to protect consumers who would see their energy bills increase because of the new greenhouse gas emissions limits. "You say it's not a problem," Blunt said. "We say if it's not a problem, what's wrong with coming up with a safe solution?"

"You are addressing climate change as if it's the Holy Grail," added Rep. Marsha Blackburn (R-Tenn.). "What we're trying to help you with is constituents and taxpayers who are saying someone needs to put some roadblocks, some timelines and checks and balances in this legislation."

Democrats countered that Blunt's amendment failed to take into account a carefully crafted agreement that sends free allowances to the local distribution companies that service electric utilities. The bill specifies that the allowances must be directed toward consumers to help offset any higher energy bills.

Markey, the chairman of the Energy and Environment Subcommittee, also questioned the legitimacy of an amendment that would kill the overall bill based on rising energy prices when those prices have already increased 25 percent in the last four years, with Energy Information Administration projections showing they will go up 15 percent by 2030.

He also cited support of the bill's local distribution company provision from several major U.S. electric utility companies, including American Electric Power Corp., Duke Energy Corp., Exelon and PG&E, as well as the National Association of Regulatory Utility Commissioners and the Edison Electric Institute, which represents investor-owned utilities. "I don't think we had EEI endorsing anything in 1990 or 1978," Markey said, referring to the last two major sets of amendments to the Clean Air Act.

Only Rep. Zack Space (D-Ohio) crossed party lines on Blunt's electricity price amendment. "I'm looking out for the cost of this bill to consumers," Space explained.

Democrats largely held together to oppose Nebraska Rep. Lee Terry's amendment that would have negated the law if gas prices reach $5 a gallon. The 25-31 vote saw four Democrats jump ship: Barrow, Space and Reps. Charles Melancon of Louisiana and Mike Ross of Arkansas.

Earlier in the day, Democrats also rejected a GOP amendment that would have sunset the climate law if China and India did not take equal steps to curb their emissions.

Republican said the bill would force U.S. manufacturers to move their operations to developing countries that do not have to meet the same environmental requirements. "It's a competition issue," said Rep. Mike Rogers (R-Mich.), the sponsor of the amendment. "Do not eliminate our middle class and send it to China."

But Democrats responded that their bill already has built into it several provisions to protect energy-intensive companies, including pulp and paper, steel, aluminum, glass and cement. That includes a 15 percent distribution of free allowances to the trade-vulnerable industries, as well as a clause that allows the president by 2025 to impose tariffs on carbon-intensive goods imported into the United States.

"I wouldn't vote for a bill if I believed this would cause us to lose jobs in the steel industry or the aluminum industry," said Rep. Mike Doyle (D-Pa.), a lead negotiator on the issue. "We're just as concerned as you are about job leakage."

Markey said the legislation would help President Obama at this December's international climate change negotiations, at which diplomats will try to reach agreement on a successor to the Kyoto Protocol. "If we want to go to [the climate talks in] Copenhagen with the ability to begin serious negotiations with the Chinese and the Indians, we have to show we are serious, as well," Markey said.

Republicans questioned the viability of the Democrats' trade language. "It's just not going to work," said Rep. Joe Barton (R-Texas), the panel's ranking member.

Other Republicans insisted that China, which recently surpassed the United States as the world leader in greenhouse gas emissions, is a long way from making similar commitments.

Rep. Tim Murphy (R-Pa.) cited congressional investigations into Chinese copyright infringement, espionage, currency manipulation and lead in toys. "And now we trust them?" on climate change, he asked. "I'd like to know where this came from."

Office of Consumer Advocacy

The panel adopted, 32-20, an amendment last night that would create a new Office of Consumer Advocacy within the Federal Energy Regulatory Commission.

The plan by Rep. Jan Schakowsky (D-Ill.) would establish the office to serve as an "advocate for the public interest" within FERC that would have a presidentially appointed, Senate-confirmed director. The office would represent consumers on rate and service issues with public utilities and natural gas companies under FERC jurisdiction.

This would include representation at FERC hearings, judicial proceedings and proceedings of other federal agencies. The advocacy office would also "monitor and review" energy customer complaints, and investigates utilities' and gas companies' service and rates, among other roles.

Schakowsky said that as energy matters become increasingly interstate, the federal office is needed in addition to existing state-based public advocates. "We provide a place where we have special advocacy for the little guy," she said.

Barton attacked the idea, and all but two of the GOP members present opposed it. Barton said the plan would be duplicative of state-based efforts. "It is very unclear how adding a national consumer advocate ... would do anything but muck up the waters," he said.

Other amendments adopted include Reps. Kathy Castor (D-Fla.) and Jay Inslee's (D-Wash.) amendment that clarifies that states may adopt so-called feed-in tariffs, which enable regulators to require that utilities buy power from renewable generators at set rates to help ensure a market. It passed 32-18 on a party-line vote.

Schedule: The markup resumes at 10 a.m. today in 2123 Rayburn.

E&E climate bill amendment scorecard

A rundown of yesterday's votes at the House Energy and Commerce Committee markup of global warming and energy legislation.

Sponsor

Description

Outcome

John Dingell (D-Mich.)

Establish clean energy bank to help with loans and loan guarantees

Accepted, 51-6

Mike Rodgers (R-Mich.)

Cancel climate law if China, India, don't take comparable action

Defeated, 26-32

Betty Sutton (D-Ohio)

'Cash for clunkers' gives consumers thousands of dollars toward buying or leasing new fuel-efficient vehicles when they trade in older, gas-guzzling autos

Accepted, 50-4

Greg Walden (R-Ore.)

Change the definition of woody biomass

Defeated, 26-32

Anna Eshoo (D-Calif.)

Clean technology business competition grant program

Accepted, voice vote

Roy Blunt (R-Mo.)

Negates law if the average retail price of electricity sold to residential sector rises by more than 10 percent in one or more census divisions

Defeated, 23-32

Tammy Baldwin (D-Wis.)

Authorizes up to 10 DOE-backed, university-based Centers for Energy and Environmental Knowledge and Outreach, to coordinate regional DOE-backed industrial and building efficiency centers

Approved, 30-19

Lee Terry (R-Neb.)

Negates law if gas prices reach $5 a gallon

Defeated, 25-31

Donna Christensen (D-V.I.)

Adds coverage for diesel emission reductions to U.S. territories

Accepted, voice vote

Zack Space (D-Ohio)

Expands the pool of bonus allowances for carbon capture and sequestration to existing power plants

Accepted, voice vote

Fred Upton (R-Mich.)

Suspends the law if the nation's unemployment rate for the prior year hits 15 percent as a result of the law's implementation

Defeated, 21-34

Tammy Baldwin (D-Wis.)

Include energy savings from solar water heating and solar light pipe technology among the eligible efficiency measures in the combined 20 percent renewable power and efficiency mandate

Accepted, voice vote

Jay Inslee (D-Wash.)

Codifies the National Bioenergy Partnership

Accepted, 36-20

Bobby Rush (D-Ill.)

Puts a 1 percent minimum on funds for low-income community energy efficiency

Accepted, voice vote

Janice Schakowsky (D-Ill.)

Creates an Office of Consumer Advocacy in FERC to represent customer interests on rate and service issues